Platinum Group also suffering from financial difficulty at South Africa mine

The mining sector passing from rather crucial period with combined stress of rising costs, falling prices and labour unrest. However Vancouver based Platinum Group Metals Ltd. believes that it could go against the norms.

The situation took a serious turn as one of its partners all of a sudden took away its $506 million platinum mining project in South Africa. Inspite of hard labour strikes and higher costs, the Vancouver company is still positive regarding keeping its plans alive.

Around half of the platinum companies in South Africa which are the world’s biggest platinum producer are predicted to be losing money, industry as per the officials.

Michael Jones - the Platinum Group president says that the company will try to manage a new finance support to move forward with its mine in the western limb of the Bushveld complex in South Africa, inspite of a huge loss of $21.8 million from its partner - Wesizwe Platinum which is a 26% partner of the project.

A warning has been fired from the Platinum Group that it might delay or pause the project. But at the same time still it is having $90m cash in hands which is enough to continue construction of the mine

with round about 1,000 workers active in the construction phase. In an interview he also declared that right now they are still active and have not yet stopped the work.

Yet another Canadian company, Vancouver based Eastern Platinum, announced that in June it had frozen its production at its flagship Crocodile River mine in South Africa. Eastplats president Ian Rozier said that “We are striving hard in this storm of increased seen all the sides and depressed metal prices.” According to him this stoppage and loss is a result of labour unrest, rising costs and an idle commodity market.

The Toronto listed vehicle of mining entrepreneur Robert Friedland, Ivanhoe Mines is still planning for its own platinum mine in South Africa and has raised $280 million for its Platreef project, which is expected to be the biggest mining project in South Africa in the next few years. This will directly or indirectly create 10,000 jobs in South Africa.

About 85% of the world’s platinum group metal resources are in South Africa. But the sector has been rudely affected by the illegal strikes and violence including the fight in which 34 protesters were killed by the police at the Lonmin platinum mine at Marikana last year.

The violence was also seen in the last week when a senior union officer was shot dead near the Lonmin mine. According to the reports - Four gunmen openly fired on his vehicle, hitting him with seven bullets. Two unions are fighting for the influence at the Lonmin mine.

Anglo American Platinum - world’s biggest platinum producer is been trying to cut thousands of jobs from its SA mines, but they faced a strong opposition from the workers, which included an 11 day strike costing the company a great loss of $100 million in lost revenue this month. At last they decided to cut only 3,300 jobs which are far less than the original target of 14,000 jobs.

Mr. Jones said that “The reliable rise in labour costs in the platinum sector is rather an unstoppable trend.” Its a difficult query to be solved as the workers are demanding a higher salary pay.

He further said that “Currently the ongoing platinum price in the world is rather illogical and a most part of the industry has no purpose to invest.”

But the Platinum Group can get a benefit from the problems of the platinum industry as its mines are not deep with a good grade, and are more competitive than any other platinum projects.

He anticipates that the platinum market will become sound again, prices will rise and the mines will flourish again. We are quite confident about it. So far no labour strikes or cost problems are seen at the mine’s construction site.